BE Group again delivered a strong quarter thanks to continued good demand combined with high steel prices and increased gross margin. The operating margin amounted to 10.4% and is by far the best operating margin for the fourth quarter since the stock exchange listing in 2006.

Compared to the corresponding quarter last year, sales increased by 73% and the underlying operating result increased to SEK 135 M (12). The rising steel prices led to inventory gains of SEK 23 M (6) and the operating result increased to SEK 158 M (18).

As mentioned in the report for the third quarter, we saw some marginal contraction in the fourth quarter as prices stabilized and more expensive, recently purchased material was sold.

Continued recovery

A certain slowdown in demand occurred at the end of the quarter as a result of lack of components within the manufacturing and automotive industries and that December had less construction projects compared to 2020. In total, however, the market recovered continuously during the year in both the construction and manufacturing industries. Measured in tonnage, Finland is, both for the fourth quarter and for the full year, slightly above 2018 which was a good year in terms of tonnage. Sweden is slightly below, but there are clear signals from both large and medium-sized customers of higher demand and increased forecasts for 2022.

Steel price trend

Steel prices continued to rise in the fourth quarter, but not at all at the same pace as earlier in the year. In total, the opening prices in the first

quarter are somewhat balanced. Some product types are going up while others are going down. A continued generally high price level is supported by high costs for input materials and high energy prices together with strong demand where customers have real needs and a good market for their products. In the longer term, the transition to sustainable steel production will also require more sustainable prices for the steel producers.

Future outlook

The ambition is to build further on a good company that is profitable in the long term and to create a stable foundation for the future. As previously mentioned, the work takes place mainly around two focus areas. Sales culture and Customer experience.

Another focus area is sustainability and in the fourth quarter, BE Group announced that a letter of intent was signed with H2 Green Steel regarding cooperation and distribution of fossil-free steel in the Nordic market beginning in 2025. As an independent steel distributor, we conduct discussions with multiple steel producers throughout Europe and already today 100% carbon offset steel is part of the offering to the customers.

We have a good history in our work with sustainability, but in the future the work will be further intensified in various ways. An important part of the sustainability work is helping small and medium-sized companies, which usually do not buy steel in large quantities, to buy sustainable steel at competitive prices.

Peter Andersson
President and CEO